Black Wednesday For Opel?
On Wednesday, June 9 2010, the German government will decide whether they’ll grant Opel live support. Or whether Berlin gives Opel a pat on the head and best wishes for their future endeavors. That’s the current plan, says Die Zeit, based on reports by the German wire service DPA. Plans can change, as they did in the past.
It looks grim for Opel.
Officially, on Wednesday the same committee will be meeting that had “scheduling problems” last Friday. Then, Germany’s Economics Minister Brüderle will decide, based on the recommendations of the wise men with the scheduling problems. That decision is expected for the same day. Or for later, if politically expedient.
It’s on the circuit in Germany that the committee had wanted to decide last Friday to shoot down GM’s request for aid. That clashed with the wishes of some Opel states that are ruled by the opposition. To buy time for a possible compromise, the scheduling problems were trotted out.
A compromise doesn’t seem to be in the works.
“In government and coalition circles, the expectation remains that the decision will be negative,” says Automobilwoche [sub]. If anybody makes GM regret their “payback” ad, then it’s Berlin and Rüsselsheim. Michael Fuchs, 2nd in command of the ruling CDU faction today says in Germany’s BILD Zeitung: “General Motor has made an $865m profit in the first quarter. It’s their duty to help their subsidiary. It’s not the duty of the German tax payer.” His colleague Patrick Döring of the likewise ruling FDP (Brüderle’s party) said: “This coalition should not throw money after conglomerates.” The German Focus magazine sees “broad opposition against government aid.”
With all of Europe going on an austerity course, it would be hard to explain why a profitable multinational needs charitable donations.
GM counters that because GM is majority owned by the U.S. tax payer, the money may not be used in Europe. Rock, meet hard place.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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The Opel dilemma is coming back to bite GM. IIRC, Opel was to be on the list of "bad GM", but with Opel having such a central role in GM vehicle design, the management of "good/new GM" decided that Opel had to be kept. Well, here we are. Opel is bleeding money, the bankruptcy is over, the european economies are flagging and Germany is resentful as all-get-out over having to fork money over to bail Greece out. GM has a nasty problem to manage, and I don't think they like any of the answers. Every couple of weeks I see a little item that makes me wonder if Chrysler is going to come out of the bailout debacle in better shape than the General. This is one of those items.
GM can more than afford to fix opel, the unions are on board, they have the cash to do it internally, they are just playing the game that every automaker plays.